Dual use of same mark on customized Jeeps not confusing, court rules

Moab Indus. v. FCA US, LLC, No. 3:12-cv-8247, 2016 WL
5859700 (D. Ariz. Oct. 6, 2016)
Moab sued FCA, aka Chrysler, for trademark infringement (via
reverse confusion) and state-law dilution based on Chrysler’s use of MOAB on a
limited edition version of its Jeep brand. 
Chrysler counterclaimed for infringement and dilution because Moab customizes
and “upfits” Jeeps and applies its Moab mark without removing Chrysler’s marks;
the expansiveness of this claim caught my eye, though unfortunately the court
doesn’t give a clear statement about just how implausible and dangerous that
claim is.  The court conducted a bench
trial and rejected everyone’s claims.
 

Chrysler’s Moab Special edition

Moab Industries’ customized Jeep

Moab has a registration for the service mark MOAB INDUSTRIES
to plaintiff for “automotive conversion services, namely, installing specialty
automotive equipment.” In 2012, Chrysler filed an ITU application for the
trademark MOAB for use in connection with “[m]otor vehicles, namely, passenger
automobiles, their structural parts, trim and badges.”  A 2012 trademark search revealed plaintiff’s
MOAB INDUSTRIES mark, as well as MOAB TAXI for “taxi transport”; in Class 39
and MOAB STAR for “lights for vehicles,” as well as, inter alia, MOAB standing
alone for “bicycles”; “retail store and online retail store services in the
fields of clothing, camping gear, sporting goods”; “juices and fruit drinks”;
and “eyewear; namely, eyeshields for use in sports activities.” The search
results also included common law uses like MOAB 4X4 OUTPOST and MOAB
OFFROAD,  both auto conversion businesses—the
former actually located in Moab.  The PTO
refused Chrysler’s application because of likely confusion with two registered
marks, one of which was Moab’s.  The
application has been suspended in light of the current lawsuit, filed in late
2012.  (Given B&B, it turns out that Moab might have been better off waiting—query
whether there’s any reason to apply preclusion in the other direction!)
For model year 2013, Chrysler introduced a JEEP WRANGLER
MOAB Special Edition vehicle and sold about 3,375 of them.  (Chrysler also sells a MOAB branded,
after-market wheel, and has done so since before Moab began selling upfitted
vehicles. The wheels themselves do not bear the MOAB mark and there was no
evidence of likely confusion between the wheels and Moab’s services.)
Relevant factors: the MOAB mark was “relatively weak,”
somewhere between suggestive and arbitrary; for these purposes, suggestive
marks are conceptually weak, and Moab produced no evidence of commercial
strength of either mark. Chrysler didn’t use MOAB on its vehicles any
more.  This conceptual and commercial
weakness decreased the likelihood of reverse confusion.
The goods were closely related, sold to the same class of
purchasers for similar uses and functions, though Moab’s version had “a more
robust stance,” whatever that means.  The
marks were highly similar; both versions placed the MOAB mark in large letters
on both sides of the hood of their vehicles, suggesting potential confusion.
Actual confusion: Moab produced witnesses testifying that web
searches for “Moab” regularly turned up first a link to Chrysler.  But such searches did not suggest any
connection between the parties, and Moab’s website expressly disclaimed any
connection.  Two witnesses bought Moab
upfitted Jeeps and later encountered Chrysler’s Moab special edition, but they
weren’t potential customers; they both knew they owned Moab-upfitted vehicles.
Another witness was clear that she knew that both parties were selling
different Moab branded Jeeps, and she was in a client-banker relationship, not
a buyer-seller relationship with Moab. 
Leading questions caused some other witnesses to express “confusion,”
but they simply had questions about the source of the Moab Special Edition, and
there was no evidence linking their questions to any potential or actual effect
on customers’ purchasing decisions.  [NB:
Materiality is not usually required!] For example, one witness was a buyer for
a dealership that bought and sold Moab-upfitted Jeeps. When he saw a Moab
Special Edition, he recognized that it wasn’t a Moab Industries vehicle, so he
went online and found information about the Special Edition.  “The lack of substantial evidence of actual
confusion suggests little likelihood of confusion.”
The parties use very different marketing channels: Chrysler
sells new vehicles through authorized dealers, while Moab buys those vehicles,
upfits them, and then resells them through auction and resale dealers, “in some
instances the used car lots of defendant’s authorized dealers. This factor
suggests little likelihood of confusion.” Though Moab has aspirations to make
vehicles, these are mere aspirations, and the parties are unlikely to expand
into each other’s goods.
The parties’ goods are expensive and intended for off-highway
use under difficult to extreme circumstances. “These are not purchases likely
to be made without careful consideration and investigation of the product.”
Intent: Chrysler chose the Moab mark “largely in
consideration of defendant’s long-standing participation in off-road jamborees
at Moab, Utah.” There was no evidence of prior knowledge of Moab Industries by
top management.  Chrysler’s Arizona VP
knew about Moab Industries, as did Chrysler’s audit group; Chrysler designated
Moab Industries as a fleet purchaser, but there was no evidence that this
knowledge was ever conveyed to the legal department or top management before
Chrysler’s CEO approved the Moab Special Edition.  The PTO’s finding of likely confusion was “entitled
to very little weight inasmuch as the USPTO would not have had access to most
of the evidence which is before the court.”
Overall, lack of actual confusion, marketing channels used, and
degree of care weighed strongly in favor of finding confusion unlikely.
Chrysler counterclaimed to cancel the MOAB INDUSTRIES based
on its use on vehicles manufactured by Chrysler, which Chrysler argued misrepresented
the source of Chrysler’s vehicles. There was no evidence that Moab was claiming
to have manufactured the Jeeps it resold. Moab’s advertising clearly advised potential
customers that Moab’s MOAB vehicles weren’t endorsed by Chrysler, or that the
sales had caused any economic harm to Chrysler or damaged its goodwill in any
way.
Dilution: Again, there was no evidence of tarnishment,
despite Chrysler’s “bold” assertions of inferior quality and speculation about
the stability of upfitted vehicles. Owners of Moab-upfitted vehicles who
testified were “well satisfied with their vehicles and plaintiff’s follow-up
services.”

Trademark infringement: True, “the use of MOAB by both
parties – and in particular, the fact that both plaintiff’s and defendant’s
MOAB vehicles display defendant’s registered JEEP, JEEP GRILLE, and WRANGLER
registered marks – gives rise to questions (some say confusion).” But there was
no evidence of confusion, and Chrysler’s trademark attorney testified that she
was not “aware of anybody in the world who expressed a belief that [plaintiff]
was actually manufacturing Jeeps.”

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